When providing services to the local service partners, there could be two main revenue models:

“Service based fee” model, in which the local partner pays to the platform for the training or technical assistance services used, at an advantageous fee, leveraging the negotiation power of the platform.

“Flat service fee” model, in which the local service partners have to pay a fix fee to the platform, allowing them to use a portfolio of services without extra charge.

In between these two opposite models, there may be many intermediate ones, in which there is a fix monthly service fee which gives right to service supplies up to a limit, from which services are payable. Further, such service fees may be subsidized by the platform -especially for the micro-entrepreneurs in the poorer layers of the community-, or to be also funded through the micro-loans. All these issues are to be discussed during the business model design phase with the local community leaders, as they are closely related to the local culture.

This section should include a diagram depicting the evolution of the revenue streams along the different stages of development, in contrast with the evolution of costs over these development stages. This diagram would visually depict whether some customer segments subsidize other segments, or some business units subsidize others, especially in the early development stages. The diagram should also include a break-even analysis to show when the platform is expected to generate profits.

Hereby it is important to remark that one of the main goals of the open innovation system –within its business model innovation section- is to create new revenue streams, increase the existing ones, and reduce costs, for this scheme may change over time, if the circumstances advise to do so.

Posted by Jordi Pera

Jordi Pera is an economist passionate about tourism, strategy, marketing, sustainability, business modelling and open innovation. He has international experience in marketing, intelligence research, strategy planning, business model innovation and lecturing, having developed most of his career in the tourism industry.
Jordi is keen on tackling innovation and strategy challenges that require imagination, entail thoughtful analysis and are to be solved with creative solutions.